Step Change Opportunities Australia: WA-359-P Farmout Agreement and WA-409-P Equity Option with Beach Energy announced.

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1 Quarterly Report Q2 FY18 December 2017 SUMMARY OF ACTIVITIES Highlights $5.5 million revenue for the quarter WA-359-P Farmout Agreement and WA-490-P Equity Option with Beach Energy executed Paus Biru-1 Exploration well approved Sampang PSC conversion to gas only complete Sustainable Business Total net production of 35,597 barrels (bbls) of oil and 373 million cubic feet (mmcf) of gas. $5.5 million revenue on oil sales of 32,197 bbls at an average price of US$55/bbl and gas sales of 345 mmcf at an average price of US$7.12 per thousand cubic feet (Mcf). $11.3 million cash and no debt. Disciplined Growth Indonesia: Paus-Biru 1 exploration well approved with Q drilling planned. New Zealand: MN1 well workover completed resulting in a 200% increase in production from the well. Indonesia: Sampang PSC Sustainability Project completed safely, on time and budget. Step Change Opportunities Australia: WA-359-P Farmout Agreement and WA-409-P Equity Option with Beach Energy announced. Production & Financial Summary Revenue during the quarter was reduced due to lower production at Maari and Sampang while workovers and the Sampang Sustainability Project were undertaken and delayed receipt of Wortel December revenue, received after the quarter end. KEY PERFORMANCE METRICS Dec Quarter Q2 FY18 Sep Quarter Q1 FY18 Change % Oil Production (net to Cue) bbl 35,597 35,697 (0) Gas Production (net to Cue) mmcf (20) Oil Liftings (net to Cue receipts) bbl 32,197 37,630 (14) Gas Liftings (net to Cue receipts) mmcf (25) Total Revenue Receipts $m (13) Production Expenditure $m (2) Closing Cash Position $m (3)

2 Quarterly Report Q2 FY18 December 2017 PRODUCTION - NEW ZEALAND PMP Cue Interest: 5% Operator: OMV New Zealand Limited Maari and Manaia Fields Net Oil Production bbl 34,866 Oil Liftings (net to Cue receipts) bbl 31,257 Revenue Receipts $m 2.24 During the quarter, production was reduced as workovers were successfully undertaken on 2 wells in the Maari Manaia fields; MN1 and MR7A. The MN1 workover involved the deepening o the Electric Submersible Pump (ESP) in the well and completion of new sections in the well bore. The workover was completed successfully and resulted in a 200% increase in production from the well to approx bbl/d at the end of the quarter. The MR7A workover successfully replaced the ESP in the well and perforated an additional zone in the well bore. Preparations for the Flowing Bottom Hole project, to reduce production pressure and expand production continue and this work is expected to be completed during Q1 CY2018. The Operator, OMV, is expected to propose an investment decision for a proposed appraisal well in the Manaia Moki reservoir during the current quarter. Cue is continuing technical and commercial assessment in preparation for this decision.

3 Quarterly Report Q2 FY18 December 2017 PRODUCTION - INDONESIA Sampang PSC- Madura Strait Cue Interest: 15% Operator: Santos (Sampang) Pty Ltd Oyong Wortel Net Condensate Production bbl Net Condensate Sales bbl Revenue Receipts (Condensate) $ ,264 Net Gas Production mmcf Net Gas Sales mmcf Revenue Receipts (Gas) $m Wortel revenue for the quarter lower than expected due to delayed receipt of December sales revenue, received on 2 Jan During the quarter, the Sampang Sustainability Project was completed, with the final removal of oil production facilities, converting the Sampang PSC to a gas only project. The Sampang Joint Venture also approved the drilling of the Paus Biru-1 exploration well, expected to spud in Q The final phase of the Sampang Sustainability Project, the removal of the Seagood production facility and the installation of a new compressors at the Grati onshore processing plant, was completed in early December with no safety or environmental issues reported and on time and budget. Gas production from Oyong and Wortel fields was reduced during the project and offline for 11 days during the quarter but has now resumed to normal levels. Operating costs are budgeted to reduce significantly in 2018 with gas only production facilities. On December 27 th 2017, Cue announced that the Sampang Joint Venture had approved the drilling of the Paus Biru-1 exploration well. The well will target the Mundu gas reservoirs at the Paus Biru prospect, 27km east of the Oyong field. Geotechnical and geophysical site surveys have been completed and preparations are underway for Q drilling. In the Oyong field, perforations of the existing Oyong-4 well in the upper gas column the Upper Mundu reservoir in the existing Oyong-9 well were completed during the quarter. The Oyong-9 perforation is a significant test of a previously untested upper reservoir section which was thought to be non-productive.

4 Quarterly Report Q2 FY18 December 2017 EXPLORATION - AUSTRALIA WA-359-P Cue Interest: 100% Operator: Cue Exploration Pty Ltd WA-359-P contains the Ironbark prospect, a large and exciting Deep Mungaroo gas target. During the quarter, Cue announced the signing of a farmout agreement with Beach Energy. Under the terms of the agreement, Beach will acquire 21% equity and free carry Cue for 4% of the cost of drilling the Ironbark-1 exploration well in WA-359-P. Beach will also reimburse Cue $900,000 for past costs. The agreement is conditional on BP exercising its option to acquire 42.5% equity in WA-359-P, Cue obtaining and extension to the permit end date and other customary approvals. Cue s option with BP over 42.5% equity in WA-359- P was also extended until 25 April 2018 during the quarter. With the BP and Beach agreements in place, 75% of the funding for the Ironbark-1 well is conditionally secured Cue has initiated discussions with NOPTA on a suspension and extension to the current April 2018 permit end date to allow analysis and review of new data as part of the Ironbark-1 drill planning. Discussions with interested parties to attract a partner or partners to form a joint venture together with BP and Beach are continuing. WA-409-P Cue Interest: 20% Operator: BP Developments Australia Pty Ltd Analysis of reprocessed seismic is continuing by the Operator. WA-389-P Cue Interest: 100% Operator: BHP Billiton Petroleum (Australia) Pty Ltd In October 2017, Cue was granted a 24 month suspension and extension of Year 4 of the permit to allow time for geological and geophysical studies to be undertaken to assess the Deep Mungaroo prospectivity, analogous to the Ironbark prospect, within the permit.

5 Quarterly Report Q2 FY18 December 2017 EXPLORATION - INDONESIA Mahakam Hilir PSC Kutei Basin Cue Interest: 100% Operator: Cue Kalimantan Pte Ltd During the quarter, Cue completed seismic reprocessing of 2D data, petrophysical analysis of 4 newly available wells, further gravity modelling and initiated structural interpretation integrating all the data. From the work undertaken, there are positive indicators towards the existence of hydrocarbons in the 1930 s Sambutan-8 well. Preliminary planning for a Naga-Utara 4 appraisal well, to twin the Sambutan-8 well, has commenced, including a review of unused drilling equipment from previous wells, which has the potential to provide significant cost savings. Cue continued discussion with the Indonesian regulator SKKMigas, for a variation to the work program to enable the May 2018 optional well commitment to be deferred until the end of Management presentations were held during the quarter with a number of potential farm-in partners. A data room, with updated data and analysis, is being held in Cue Jakarta office. Mahato PSC Central Sumatra Basin Cue Interest: 12.5% Operator: Texcal Mahato The Mahato partners continue discussions to move forward with exploration and sign a legally binding Operating Agreement. Operator discussions with SKKMigas, on a potential extension to the exploration period of the permit are continuing.

6 Quarterly Report Q2 FY18 December 2017 CORPORATE During the quarter, Cue continued to focus on cost minimisation for a sustainable business. Mr Ducan Saville resigned as a director of Cue Energy Resource Limited on 14 December 2017 and Ms Melanie Leydin was appointed as a director on the same day. Melanie Leydin Chief Financial Officer Various statements in this report constitute statements relating to intentions, future acts and events. Such statements are generally classified as forward looking statements and involve unknown risks, expectations, uncertainties and other important factors that could cause those future acts, events and circumstances to differ from the way or manner in which they are expressly or impliedly portrayed herein. Some of the more important of these risks, expectations and uncertainties are pricing and production levels from the properties in which the Company has interests and the extent of the recoverable reserves at those properties. In addition, the Company has a large number of exploration permits. Exploration for oil and gas is expensive, speculative and subject to a wide range of risks. Individual investors should consider these matters in light of their personal circumstances (including financial and taxation affairs) and seek professional advice from their accountant, lawyer or other professional adviser as to the suitability for them of an investment in the Company. DIRECTORS GA Worner (Non Exec. Chairman) Koh Ban Heng (Non Exec. Director) DP Saville (Non-Independent Director) resigned 14/12/2017 M Leydin (Exec. Director) appointed 14/12/2017 CHIEF EXECUTIVE OFFICER Mathew Boyall CHIEF FINANCIAL OFFICER Melanie Leydin REGISTERED OFFICE Level Queen Street MELBOURNE VIC 3000 Phone: Fax: mail@cuenrg.com.au Web: AUDITOR BDO East Coast Partnership Level 18, 727 Collins Street MELBOURNE VIC 3000 SECURITIES EXCHANGE LISTING ASX: CUE SHARE REGISTER Computershare Investor Services Pty Ltd Telephone: (within Australia) or (outside Australia) web.queries@computershare.com.au Website:

7 Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report Appendix 5B +Rule 5.5 Mining exploration entity and oil and gas exploration entity quarterly report Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16 Name of entity Cue Energy Resources Limited ABN Quarter ended ( current quarter ) December 2017 Consolidated statement of cash flows 1. Cash flows from operating activities 1.1 Receipts from customers Current quarter Year to date (6 months) 5,501 11, Payments for (a) exploration & evaluation (853) (1,140) (b) development - - (c) production (3,201) (6,471) (d) staff costs (319) (1,931) (e) administration and corporate costs (230) (394) 1.3 Dividends received (see note 3) Interest received Interest and other costs of finance paid Income taxes paid (395) (1,148) 1.7 Research and development refunds Other (GST) (32) Net cash from / (used in) operating activities Cash flows from investing activities 2.1 Payments to acquire: (a) property, plant and equipment (b) tenements (see item 10) (c) investments - - (d) other non-current assets production properties (887) (1,772) + See chapter 19 for defined terms 1 September 2016 Page 1

8 Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report Consolidated statement of cash flows Current quarter Year to date (6 months) 2.2 Proceeds from the disposal of: (a) property, plant and equipment - - (b) tenements (see item 10) - - (c) investments - - (d) other non-current assets Cash flows from loans to other entities Dividends received (see note 3) Other (provide details if material) Net cash from / (used in) investing activities (887) (1,772) 3. Cash flows from financing activities 3.1 Proceeds from issues of shares Proceeds from issue of convertible notes Proceeds from exercise of share options Transaction costs related to issues of shares, convertible notes or options Proceeds from borrowings Repayment of borrowings Transaction costs related to loans and borrowings Dividends paid Other (provide details if material) Net cash from / (used in) financing activities Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above) 4.5 Effect of movement in exchange rates on cash held 11,674 12, (887) (1,772) (119) 4.6 Cash and cash equivalents at end of period 11,336 11,336 + See chapter 19 for defined terms 1 September 2016 Page 2

9 Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report 5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts Current quarter Previous quarter 5.1 Bank balances 5,505 5, Call deposits 5,831 5, Bank overdrafts Other (provide details) Cash and cash equivalents at end of quarter (should equal item 4.6 above) 11,336 11, Payments to directors of the entity and their associates Current quarter $A' Aggregate amount of payments to these parties included in item Aggregate amount of cash flow from loans to these parties included in item Include below any explanation necessary to understand the transactions included in items 6.1 and Directors fees and Director s consulting fees 7. Payments to related entities of the entity and their associates Current quarter $A' Aggregate amount of payments to these parties included in item Aggregate amount of cash flow from loans to these parties included in item Include below any explanation necessary to understand the transactions included in items 7.1 and See chapter 19 for defined terms 1 September 2016 Page 3

10 8. Financing facilities available Add notes as necessary for an understanding of the position Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report Total facility amount at quarter end Amount drawn at quarter end 8.1 Loan facilities Credit standby arrangements Other (please specify) Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well. N/A 9. Estimated cash outflows for next quarter 9.1 Exploration and evaluation Development Production 2, Staff costs Administration and corporate costs Other (tax) Total estimated cash outflows 4, Changes in tenements (items 2.1(b) and 2.2(b) above) 10.1 Interests in mining tenements and petroleum tenements lapsed, relinquished or reduced 10.2 Interests in mining tenements and petroleum tenements acquired or increased Tenement reference and location Nature of interest Interest at beginning of quarter Interest at end of quarter See chapter 19 for defined terms 1 September 2016 Page 4

11 Compliance statement Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A. 2 This statement gives a true and fair view of the matters disclosed. Sign here:... Date: 24 January 2018 Chief Financial Officer Print name: Melanie Leydin Notes 1. The quarterly report provides a basis for informing the market how the entity s activities have been financed for the past quarter and the effect on its cash position. An entity that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report. 2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report. 3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity. + See chapter 19 for defined terms 1 September 2016 Page 5

12 Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report APPENDIX A QUARTERLY REPORT OF CONSOLIDATED CASHFLOWS - QUARTER ENDED 31 DECEMBER 2017 List of Mining Tenements PERMIT OPERATOR LOCATION CUE INTEREST (%) Petroleum Properties Indonesia Sampang PSC (i) Santos (Sampang) Pty Ltd Madura Strait Offshore Mahakam Hilir PSC Cue Kalimantan Pte Ltd Kalimantan Onshore Mahato PSC Texcal Mahato Pte Ltd Central Sumatra Onshore Australia WA-359-P Cue Exploration Pty Ltd Carnarvon Offshore WA-389-P Cue Exploration Pty Ltd Carnarvon Offshore WA-409-P BP Developments Australia Pty Ltd Carnarvon Offshore New Zealand PMP OMV New Zealand Limited Taranaki Offshore 5.00 (i) economic interest in the Jeruk field See chapter 19 for defined terms 1 September 2016 Page 6